Google says it can build data centers the right way. Some experts and residents are skeptical

Key points

• Google plans a 780-megawatt data center in Pine Island, Minnesota, tied to a deal with Xcel Energy.
• Google would fund 1,400 megawatts of wind, 200 of solar and 300 of battery storage.
• The agreement awaits approval by the Minnesota Public Utilities Commission.

Google has proposed a 780-megawatt AI data center in Pine Island, Minnesota, a town of about 4,000 residents an hour southeast of Minneapolis. Under a deal with Xcel Energy, Google would pay for more wind, solar and battery capacity than the data center is expected to use.

The company says the arrangement can finance a cleaner, more reliable grid while keeping it on track for carbon-free energy around the clock by 2030. The agreement is pending approval by the Minnesota Public Utilities Commission.

What the deal includes

Google plans to finance 1,400 megawatts of wind, 200 megawatts of solar and 300 megawatts of battery storage on Xcel's grid. Google said the additions exceed the data center's capacity because wind and solar do not generate power at all times. Xcel said the new power will serve all local customers, not just Google.

The agreement includes minimum demand charges and exit fees. Google would pay for at least 75% of its contracted capacity even if it uses less, and would owe up to eight years of minimum demand charges if it ends the deal early.

Nobody wants to have a big buildout and then have nowhere for that power to go and nobody to pay for that power

— Amanda Rome, executive vice president and chief customer officer at Xcel Energy

Skepticism from experts

A March Gallup survey found 71% of Americans opposed a data center in their local area, with energy usage a leading concern. A Pew survey in July and August found half of Americans said data centers would be mostly bad for the environment and household energy costs.

Jigar Shah of the consulting firm Multiplier said operators could build smaller facilities where the grid has unused capacity, which he said would lower everyone's rates. David Pomerantz of the Energy and Policy Institute said utilities earn returns of around 10% on new infrastructure, giving them little incentive to use existing grid capacity instead.